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Massachusetts Consumer Protection Law for Businesses

The Massachusetts Consumer Protection Act (MCPA) is supposed to protect consumers and other businesses from unfair and misleading business actions. However, even businesses that are operating under the law may be forced to deal with false or fraudulent Chapter 93A claims. It is important to understand how to respond to Chapter 93A demand letters and avoid potential liability and unnecessary litigation. 

Consumer Protection Law Violations

Chapter 93A does not provide a clear definition of the kind of actions that violate the MCPA. Instead, illegal actions are “unfair or deceptive practices.” Instead, the state provides some possible examples of unfair or deceptive practices, including: 

  • Charging a higher rate than the published or advertised price; 
  • A refund policy that is not posted or not enforced uniformly; 
  • Providing misleading services or false guarantees;
  • Fails to follow through with a warranty; or
  • Using “bait and switch” advertising to convince a consumer to purchase a more expensive item.

Unfortunately, many consumers who change their mind later or regret making a purchase may try and claim there were unfair or deceptive business practices when the business did nothing wrong. 

Business-to-Business Consumer Protection Violations

The MCPA is not limited to individual consumers but it also provides the same protections for businesses conducting business with a company that is allegedly using unfair or deceptive business practices. Again, a business could try and claim MCPA violations for a poorly negotiated deal or making a bad business decision even though the other company did nothing wrong. 

Attempt to Resolve the Complaint With the Business

The first step in handling an MCPA complaint is to send the business a letter at least 30 days before filing a claim. This 30-Day Demand Letter is intended to give the consumer and business an opportunity to resolve the complaint. 

The 30-Day Demand Letter must have enough information to let the business know what the transaction was about, who was involved, the settlement requested, and how to respond. This generally includes the following information from the consumer or business: 

  1. Full name and address
  2. The description of the unfair or deceptive act or practice
  3. The injury suffered as a result of the unlawful act
  4. Demanded relief including the amount of money you are demanding to recover.

As a business, you need to respond to a 30-Day Demand Letter in writing within 30 days of receipt. Failure to respond to a demand letter within 30 days can limit your options and expose your business to penalties, triple damages, and paying legal fees of the consumer who is bringing the action.  

If you do not respond to a demand letter or send an unreasonable offer, the court may rule in favor of the consumer for damages or $25. If the business's response was a willful or knowing violation of the MCPA or refusal to settle the issue was made in bad faith, the business may be liable for two or three times the amount of actual damages. You may also be liable for reasonable attorney's fees and costs. 

Investigate a Chapter 93A Claim 

A traditional response to civil litigation claims may be to respond that the party has insufficient information to respond but that may not work in a consumer protection claim. When sent a 30-Day Demand Letter, the business has to take affirmative steps to investigate the claim. In response to the letter, the business should also indicate that they took reasonable steps to investigate the claim and the basis for the response, whether to make an offer or deny the claim. 

If more information is needed to make a proper response, you may be able to respond that more information is needed to respond to the demand letter. If you need additional time to provide a response, you may be able to ask the consumer for additional time. If the consumer denies an extension to make a reasonable response, you may be able to ask the court for an extension. 

Any business engaged in a trade or business in Massachusetts should not only be aware of the MCPA requirements but should also have measures in place to investigate and respond to Chapter 93A claims. Talk to your Massachusetts business lawyer about Chapter 93A claim procedures to protect your company from unnecessary costs and litigation. 

Options for Resolving a Complaint

As a business, you have a few options in responding to a 30-Day Demand Letter. Most reasonable complaints can be settled through offering a refund, discount, or exchange. However, not all complaints may have a reasonable basis. After making a reasonable offer to settle the issue, the consumer may try and file a lawsuit or apply for mediation. 

If the consumer files a lawsuit, they may take the case to Small Claims Court, if the claim is less than $7,000. Claims over $7,000 may be filed in District Court or Superior Court. If you made a reasonable settlement offer (in response to the 30 Day Demand Letter), then the court may limit an award to the consumer. 

Reducing the Risk of Liability for a Chapter 93A Claim 

The best options for reducing the risk of liability for an MCPA claim are to make a timely response to a demand letter and provide a reasonable settlement offer. By responding in time with a reasonable offer, the consumer will be required to take additional action to seek a settlement or legal award. Failure to respond can result in an automatic finding against the business. 

Making a reasonable offer can also reduce the risk of liability. It can avoid a finding of bad faith or willful and knowing refusal to comply with the MCPA, which can lead to double or treble damages and legal fees. If the consumer rejects a reasonable settlement offer, the court may also be more likely to limit the consumer's award to not more than the original settlement offer. 

Experienced New England Business Attorney 

Timely response to a Chapter 93A letter and making a reasonable settlement offer can reduce the risk of liability for MCPA claims for your business. The Katz Law Group has 36 years of experience with business law in Massachusetts and across New England, including representing businesses in consumer protection actions. Contact the Katz Law Group today.

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